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Subject: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 12:55 PM European-based giant oil firms have been making billions on the stock market trading floor, one company, BP, making at least 20 percent of its income through trades in oil and its derivatives ($2-3 billion of BP profit of 16.7 billion in 2009). BP traders were fined for trying to corner the propane market, the largest fine ever levied by the Commodity Futures Trading Commission. BP's gambling on futures has netted $2-3 billion a year with market wagers on cruse oil, gasoline, natural gas and derivatives from these basic products. More than 137 billion barrels of oil changed hands on the NYMEX exchange; energy derivatives on the over-the-counter markets amounted to a trillion dollars more. Royal Dutch Shell is another big trader, but fewer of its wagers take place on the American market. Estimates place its activity at about half that of BP. BP as a result of the spill has fewer resources with which to gamble. "With their bonuses likely to be decimated by the company's financial problems, many BP traders are eying opportunities at Wall Street firms or with companies overseas." Some have joined the Chinese firm Brightoil (Singapore) The BP case in 2007 resulted in $303 million in fines. "According to the government complaint, traders in Houston amassed short-dated futures contracts on 5.1 million barrels of propane stored in Texas pipelines in February 2004- 800,000 more barrels than existed in the system." BP had been engaged in trades with their massive crude oil holdings stored in Cushing, Oklahoma, but were not prosecuted because the statute of limitations had nearly run out. Exxon-Mobil, Chevron, and seemingly other American concerns shy away from big market wagers. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 12:58 PM The above based on the report in the online New York Times, June 28, 2010; Global Business, "BP Loses Trading-Floor Swagger in Energy Markets," Nelson D. Schwartz, June 27. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: gnu Date: 28 Jun 10 - 01:29 PM Boggles the mind. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 02:01 PM Looking further into major oil company operations- TOTAL (French)- the annual report for 2009, in the preamble, states that the company "engages in all aspects of the petroleum industry.......... and the trading and shipping of crude oil and petroleum products." The word "trading" probably covers trades made by their on-floor traders in markets. In a section "Sensitivity to Oil and Gas Prices," this little bit of information- "The majority of TOTAL's natural gas production is sold under long-term contracts. However its North American production, and to some extent its production from the united Kingdom, Norway and Argentine, is sold on the spot market." I did not go into the details of their Annual Report, so do not know the extent of their activity in the markets. It may not be recoverable from the data presentations in the report. A question that comes to mind is how much covert cooperation on buying and selling by major Oil company traders is involved. Market prices could be driven up easily if their holdings in storage are traded cooperatively. Such market manipulation does not seem to be a part of American company procedures, but the size of holdings of Shell, Total, BP, ENI, Citigroup, etc. would put pressure on reserves held by American companies. I admit I don't know the regulations and laws involved, but it seems to me that government control needs to be increased on corporate gambling activities, which in my view should not be a part of corporate income from production and sale of natural resources. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 04:19 PM In BP's Annual Report, there is an entry "Earnings from Associates." Among other sources, that seems to cover floor traders. A good floor trader can easily earn a million or more in a year. The job is hectic, but good rewarew, |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Greg F. Date: 28 Jun 10 - 04:32 PM Obviously another article by another U.S. Bigot attacking poor, defenseless BP. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 04:41 PM Yes, Greg. Obviously. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Richard Bridge Date: 28 Jun 10 - 05:30 PM Make up your mind. Either you're for capitalism or against it. I'm against it. You Murkans largely seem to be concerned about it only when it's practised by someone else. I am however concerned about condemnation heaped on people based not on evidence but on prejudice. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 05:39 PM Just reporting, Richard, just reporting. I do a little gambling myself- (the 5 cent slots at the local Indian casino). Not in the league of BP or Shell. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Sorcha Date: 28 Jun 10 - 06:28 PM Are we surprised? |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Bobert Date: 28 Jun 10 - 07:34 PM The entire concept of "futures trading" is part of Boss Hog's Plan to fleece the working class... No one is actaully "making: on red cent... All they are doing is playin' a high-priced poker game where they (the rich) will always win and Joe Sixpack will lose when he fills up his tank... Futures trading should be illegal... Hey, I understand going to an auction and bidding on something that is there in front of me and if I turn around and make a profit then fine... But going to an auction where there is nothin' in front of me knowing that if when it is in front of me and I've allready bought it that if it looks like a loser and I can pass the loss down to the end-user should be criminal... It is socializing risk!!! Everyone pays but the gambler??? Beam me up, Scotty... This joint is is becoming more insane by the day... B~ |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 08:49 PM It is a little weird, Bobert. BP actually was sitting on large quanties of propane (in one case) and crude oil (in the other), with their stable of floor traders trying to force the price up. It was a 'tetch' illegal, but the fines are miniscule in relation to the profits that can be won. BP et al. are making trading profits, which are distributed to stock holders, and used in exploration and purchase of inventory. The hired guns (the floor traders) can receive rich bonuses and retire to Caribbean mansions. The futures markets, if there are still a few people out there who don't know about them, are our most advanced form of legalized gambling, dealing in everything from pork bellies to coffee to grain to metals to currencies- you name it. The U. S., if they tried to make futures trading less easy, would still have the problem since futures markets are world-wide. Many Canadians play currency in a small way, switching back and forth from Canadian to U. S. dollars in their bank and savings accounts. Some also gamble with the Japanese yen, high at the moment in relation to the U. S. dollar, causing Japanese exporters some problems. Swings of $2.00 per hundred can produce a fortune if you have enough cash to play- and much less risky than no-limit poker. In either case, you have to have the bucks to cover loss (futures contracts have a due date), if the market (or the deal) go against you. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 08:59 PM Added note- Canadian banks can trade in foreign currencies; only the few Federal Reserve banks in the U.S. can do that. |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Bobert Date: 28 Jun 10 - 09:10 PM And ya know what, Q??? BP prolly made (stole) more in one day than they have spent so far on their oil spill... That is excatly why the way that commodities and futures are traded should be outlawed... It is not a free market at all... It is a terribly manipulated market... It isn't makin' money... It's stealing money... It's the reason why the working class is suffering... All risk for the rich have been codified and socialized... Meanwhile, the rich hire these high priced PR firm and lobbiest to make themselves look like thay are the good guys... They aren't the good guys... They are as evil as evil has ever been... They have written the rules and they ahve over the last 30 years fleeced the working class so bad that all of them outtta be in jail for life... And their wives and their kids, their accountants who hide the pofits offshore so they won't have to pay taxes... We can no longer afford the rich!!! They must go... B~ |
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Subject: RE: BS: Oil Giants Gambling on the Trading Floor From: Q (Frank Staplin) Date: 28 Jun 10 - 09:53 PM Now if I was rich- I would still 'afford the poor'. Someone has to work while the rich folks play. |
